$4.5M in Sales But Seller Doesn't Want to Seller Finance - What Do I Do? - Deal Walkthrough

Most seller's would rathern to seller finance but in the walkthrough, I navigate how t have that conversation with the seller.
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Roland Frasier is co-founder and principal of three current Inc. Magazine fastest-growing companies and he has founded, scaled, or sold 24 different 7 to 9 figure businesses ranging from consumer products to industrial machine manufacturing companies with adjusted sales ranging from $3 million to $337 million.
Currently growing Scalable.co, DigitalMarketer.com, RivalBrands.com, and Plattr.com while advising over 150 other companies on digitally centric customer acquisition, activation, referral, retention, and revenue strategies and plan implementation.
You can also find other content by Roland on:
The Business Lunch Podcast KZbin Channel 👉 / @businesslunchwithrola...
The War Room Mastermind 👉 / @warroom9086
Subscribe to Roland Frasier 👉 / @rolandfrasierepic
To learn more about Roland Frasier 👉 msha.ke/rolandfrasier/
Connect with me on social:
🎵 TikTok: / rolandfrasier
📸 Instagram: / rolandfrasier
📱 Facebook: / rolandfrasierpage
💼 LinkedIn: / rolandfrasier
Subscribe to Roland Frasier 👉 / @rolandfrasierepic
#rolandfrasier #epicchallenge #buyabusiness #sellerfinancing

[@jjfade2391]

I love nothing more then watching Roland break down deals step by step , better then any movie or anything you can watch!!

[@RolandFrasierEPIC]

Thanks Jordan! So much fun breaking down these deals and finding creative ways to make them work!

[@allisononyoutube5794]

Absolutely!!!❤❤❤❤

[@Arthur-Silva]

Agree. I love my mom tho. 🤷🏼‍♂️

[@jjfade2391]

@@Arthur-Silva haha trudat 🤣🤙🏻

[@TheRocboy100]

This is why we need mentors. Create doors you don't know you could walk through!

[@RolandFrasierEPIC]

Totally agree Roc!

[@wbrownati]

Roland is pretty freaking smart. I know some business brokers who aren't fan, but most brokers suck anyway. He can visualize deals so clearly.

[@RolandFrasierEPIC]

Thanks Wayne! There are definitely business brokers who are creative and who get the stuff we do, but they are definitely in the minority. Keep doing deals! :)

[@makeupdrawer1013]

I have listened to this about 10 times. Great Example!

[@RolandFrasierEPIC]

Thank you!

[@danielkearns9240]

Absolute gold!

[@jjfade2391]

This guy such a baller love his videos. Helps me shake off the nerves of buying a business

[@bamatexas01]

Totally agree

[@thaaught4582]

I loved it

[@vincentjamesholthouse]

Just wanted to comment and show my support. Love your work.

[@RolandFrasierEPIC]

Thank you Vincent!

[@jameskim3176]

This is so good!!

[@RolandFrasierEPIC]

Thank you James!

[@armadventurer]

Great breaks down offering different solutions once numbers get ‘adjusted ‘ correctly 😂. However this Breaks down the monthly Profit to be paid - but does that equate to the actual cash flow the business has to pay each month to cover the respective parties ? Rarely seen business profit in monthly basis equate to the same amount each month… especially with no arr or mrr as in this case… although also no seasonality in this case … or is it cash in bank that is being worked in here …

[@HyperMaintenace]

You had me at 1x EBITDA lol

[@abellara9169]

Amazing content and really creative solutions. Question: do you really recommend to keep the owners with equity in the business rather than maybe pay them like a consultancy fee so that you can keep 100% of the business? Don't know the owners but I'll like to minimize the risk of having them influencing on businesses decisions as much as I can. Your thoughts?

[@davystun8454]

i had very same question. im assuming, that they are staying on to manufacture the product and keep up the biz. relationships, where the buyer would just be working on his value add ideas. I will say regarding the Biz. decisions, they can offer an opinion, but being 75% owner, you ultimately are sole decision maker. That being said, I still like your idea of ultimately working towards 100%. lastly, I got the feeling this is a situatiion where they are friends, rather than Joe Shmo Stranger Buying it. But these examples are great for learning the language and the creative ways to "move the chips" around.

[@RolandFrasierEPIC]

It really depends on the seller and what is fair to them. If they are reluctant to seller financing then typically they are reluctant to lose all ownership.

[@RolandFrasierEPIC]

Also, it is very common to have sellers remain and work in the business. The private equity model typically has the sellers remaining to operate after the sale with 10% to 30% ownership. It is helpful because then you do not have to go find new operators and also the sellers get excited about a potential second exit at an even higher price once you build up the business and sell it to someone else.

[@m3consulting212]

The asking Price doesn't look legit. The EBITDA multiple is at least 3 to 5 Xs here. So the asking price is at least $3M to $4M. Unless the balance sheet and seller financing took price down, but not by that much. Doesn't seem to work

[@KyleRutledge]

For the 48 months during the earn-in period, would you not have the decision-making power in this case since you only have 20%? Or would you include some clause that still gives you that power during that period?

[@RolandFrasierEPIC]

It doesn’t really matter because you would only have a 20% say anyway so no control. You could include a clause if need be, but with only 20% it would still not make a difference.

[@judyjones475]

I made the mistake of holding the note when selling my small resort of 35 years in MT. Broker got all of the down and most of the 4 payments they made and I have been I court for over 4 years trying to get it back, suffering thru their bankruptcy and 6 reorganization plans, Covid delays, preexisting liens that attached to the property that didn’t appear since they formed a new LLC, and now an less than stellar atty that rarely replies as we go thru foreclosure. (Took 22 turn downs to get him, as the debtor was being sued by everyone else and conflicts of interest for every other atty in Montana). Just wanted to retire and live my life in peace, instead 4 years of pain and 1 unsuccessful OD, my biggest failure that I did not succeed and will next time if this keeps dragging out. . Now I live in poverty relying on handouts from the food bank to get by. My advice? Never hold the note.

[@RolandFrasierEPIC]

Wow Judy, that’s such an unfair situation. Sorry that you have had to deal with that. Sounds like you go some less than great advice from the attorney who represented you going into the note. There are several things a seller can do to protect themselves when taking back a note, but also there is the risk to the seller of receiving not the best legal or business advice from their advisors and there are also some buyers who are less than ethical. It sounds like you may have unfortunately had both of those things on that deal!

[@williamsaunders3382]

Hey Roland! For a scenario like this one, will the seller expect you to provide your personal credit/credit score or sign a personal guarantee?

[@RolandFrasierEPIC]

They may ask for it but you do not have to agree to those terms and only put the SPV as liable.

[@williamsaunders3382]

@@RolandFrasierEPIC Thanks for the info! It's very helpful, and greatly appreciated. 🙂👍

[@criptiphelper1971]

Did he complete the deal and hos is it going ?

[@williamsaunders3382]

Hey Rowland! How can I get a Deal Walk-through with you?

[@RolandFrasierEPIC]

Send me a DM on Instagram and we'll see if we are a good fit.

[@ThatGuy_Nick]

You typically have an advisor team to do these deals correct? Also do you have any books on how strategized for this, analyzed the deal etc?

[@RolandFrasierEPIC]

Yes!

[@seanrobbins3855]

Nothing against this gentleman you are consulting for, but he never realized that you had the wrong purchase price. My point being, you don’t have to know much to acquire a business. The difficult part of these deals is having the balls to get rejected. Unfortunately, that’s a BIG hurdle. Thanks for the video!

[@RolandFrasierEPIC]

Sean, agree 100% on how important it is to understand that the only way to ultimately succeed is to put yourself out there either yourself or through a business partner and risk the possibility (or even inevitability) of having your offers rejected. Thanks for watching and commenting.

[@m3consulting212]

@@RolandFrasierEPIC Ok. please address the incorrect asking price. That's a huge issue here within this presentation

[@quintinmason3723]

what is deal done software to run numbers ?

[@RolandFrasierEPIC]

Quintin, it’s a software that I created to help analyze and negotiate these deals. You can find out more from messaging me on social.

[@mndeniminenhle7881]

A guy once me why should i seller finance you my property that is cashflowing the same amount you gonn give it to.me then i couldnt answer i lost the deal

[@RolandFrasierEPIC]

There are lots of reasons to seller finance, it will benefit them financially for taxes depending on their income bracket, and it allows them to get out of operations of the business. This is why I ask what they are going to do with the money of the sale of their business so I know what number we need to hit to get the deal done.

[@BatistaInvests]

Where do we get started?

[@RolandFrasierEPIC]

Easiest place Michael is my free challenge at GetEpicChallenge.com

[@JFabric500]

New here, what software did he say he ran the dealer financing from?

[@RolandFrasierEPIC]

JC, it’s software I created for this called DealDone.

[@garydownes1594]

Does business insurance play into this?

[@RolandFrasierEPIC]

In what way Gary?

[@TshepoKotelo]

Is this one of your students and if so how can I become your student?

[@mo0trix]

What is an earn-in? Isnt't it called earn-out?

[@RolandFrasierEPIC]

Earnouts are payments that are contingent on certain things happening in the future. They are generally 10-40% of the purchase price and last from 1 to 4 years. Earn-ins are different as they are used to grant someone an equity or equity like interest in the company in exchange for that person contributing some skills, experience, time, knowledge, or connections to the business. They “earn in” to the business in exchange for providing that value.

[@RussellD11]

nobody is going to sell a business for its yearly net profit? like for real? I thought it was 2X sales, this should be a $9M company? plus your going to PAY ME WITH MY OWN INVENTORY I OWN?? Really? LOL are people that dumb?

[@RolandFrasierEPIC]

People who are highly motivated to get out of their business would prefer this over having to shut the entire thing down. Businesses are usually sold off their EBITDA and multiples so it is not always 2X sales.

[@anthonyrussell4888]

Great deal breakdown, Roland.:)